Want to buy a house for $600,000 in California, dual income $80k / year. What are my options?

We have saved around $20k towards a down payment but saving 20% of the purchase price is a little out of reach. We are first time home buyers.
by mbradleyfrom Santa Barbara,
California. Mar 22nd 2013 Reply

Unfortunetly, once you add the Tax, HOI and MIP your income ratios are going to be way off for a $600,000 purchase. Your income ratio on housing expence can't exceed 46% of your gross income. $3,066 would be your max. payment PITI and MIP include, your at about $2,500 monthly on PI, only gives you $566 monthly towards Tax, HOI and MIP.....MIP ALONE is $600+. unless there is additional income the numbers just don't work on this purchase price. Need to look for lower priced home.

Your probably biting off more than you can chew.. FHA payment would be in the $3700 +- per month.. Which would put your Debt to Income Ratio at 55%, and that doesn't include any other debt you have.. This deal will never fly.. You need to be closer to $500K home, and that's assuming you have no other debt.. You should stop guessing and contact a local mortgage broker.. Let them look at your complete profile, and you will know exactly what you qualify for.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Good job on the respondents who were honest with these folks and said that a 600K purchase with 20K down and 80K in income is not anything someone would want to do. And I shake my head at those who gave any kind of an indication to these people that this could be done.Even if you were somehow approved (a non occupying co-borrower would be the only way I can think of) you would be eating boxed mac n cheese every night in your new home. With just a 5yr ARM at 3.5%, PITI & MI would be over $4000 a month. On $6660 in income? After taxes you would have maybe $1000 to $1200 every month to pay everything else. Sorry, I must be honest and say this just wouldn't work.

We would need some more info but if your county allows it you would need to do an FHA purchase and you would need at least 21000.00 for down payment. Then we would need to see if your debt to income works and what your credit scores are. If you have only the 21k for down payment then we would need to do a sellers concession to cover closing costs. that is your only option. Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation.Ask for Michelle or Benny We will find the Best Mortgage Option to suit your needs!You can check us out at www.BestMortgageOption.com

HelloThere are several options for you but we should talk directly about those as it's not a black and white answerPlease email me when you're available today or give me a call!ThanksKimkclancy@pinnacle-mortgage.com949-933-9058

Hi My office is loacted here in Irvine, CA I am affiliated with several lenders out here so I have many avenues for you that you may benefit in taking if you already have a house in mind try to get an acceptance letter and I can pull an FHA case number for you before April 1st, 2013 so you wont be stuck with the new mortgage Insurance..You can put as little as 3.5% down on an FHA. If you would like you may call me directly at 201-673-7205 I can direct you into getting you into you new home!!Best of luck!

A better question is how much you will be comfortable with as a monthly payment... With 80,000 income (assuming that is your gross, not take home) you are likely to have a very difficult time qualifying unless you have a very large downpayment.

William is correct here, so please re-read his post. At 80K per year, your ratios are very high. I will add one thing for you to ponder... Are you comfortable with a payment amount at that level, even if you could get approved?

If you come down to a Conventional loan amount of $417,000 => then divided by 97% = $430,000; and that leaves you $7,000 left over. You didn't say what you had for "reserves" in i.e. 401k etc. But if you find a Seller that is "engaging or playful" with you and offers up "Seller Concessions" then we can ELIMINATE the "MI"! Then you have a $417,000 loan with NO MORTGAGE INSURANCE!Comments are correct = 3-4x your salary, depending on where, what taxes are - and it is "more house with LESS debt, and LESS house with more debt." If you would please call me or go online to my website www.JeffAlbrecht.com then I will able to get you prequalified. I look forward to working with you. JAlbrecht@PrimeLending.com 512-381-4643

It all depends how you want to structure your loan and your future goals. I think a 30 year fixed is prudent but knowing that 600K doesn't buy much in Santa Barbara you might have to look at an adjustable rate product to be able to qualify. Of course these come with risk and you will have to have a good reliable exit strategy out of this loan otherwise I would avoid it. Exit strategy might be: You will make much more money in a few years, will only live there for 4 years etc. If this is a long term home then a fixed rate is a must but due to higher rates on ARM loans, the payment will limit you on options. I am licensed in California CA DRE Lic 01366552 with an office in La Mesa (San Diego). Feel free to reach out to me if you want me to run a few different scenarios that might work.

Hello, You are probably right on the cusp of affordability and/or qualification. You really need an experienced lender to analyze your situation and advise you realistically as to what you can and can't qualify for. The 2nd question will be whether you can afford what you can qualify for. That goes past your actual income and becomes a lifestyle question for you to ask yourself.... I'm happy to help with the financing or just give you advice. If you need more information, or a competing rate quote call, email or use my live support button to discuss or get in touch with me. Web Address for live chat or quote is: http://www.loansfromrob.com/quote/ Email is robertlh66@verizon.net and direct phone is 240-752-7549. Good Luck -- Rob Hanson

Located in Huntington Beach, Ca. Dear sir, Unity West Lending has a history of assisting homeowners just like you secure a mortgage home loan for themselves. Please give us a call to go over your options. We would love to get to know you and you us, then discuss what options you have, there are several beneficial options as we deal with over 30 different banks, investors and Lenders. We also pride ourselves on being a mortgage broker, as well as a Direct lender offering the best of both worlds to our Client's. No matter what, Unity West Lending is here to see you succeed! CA-DBO: License/Registration #: 603L028 | CA-BRE: License #: 01886366 | NMLS ID #: 349874

Well if you want to buy now you will need to be within your purchasing power base on what you posted your cash of $20,000 and your income of $80,000 you will be around $315,000. Of course it could all change if you have other debt and income cannot be verified. More information is required if you like to discuss it further I can be reached at ballen@bankofengland1.com or 800-485-1387 Ext. 116.

i am sure the timing of all this has passed,but I am hopeful that someone else reading this will find it beneficial. I am not a lender or a realtor..I am a person who has to get up and go to a job to pay my bills every day.There are a few folks here that have been honest. I make over 200,000.00 / year, and I bought a 600,000.000 house. Sure, you may qualify, but your down will cost you in MPI and monthly tax escrow...and what will you do should your gas main break INSIDE your house (like mine did). can you readily come up with the money to have an emergency repair on Christmas night? Of course you can cover it on your credit cards, but at some point , those minimum payments won't make a dent in the principle.I say all of this because if you have good credit, 2nd and 3rd tier lenders will get you a loan...and god forbid we have another mortgage crisis. Many lenders went belly up 2 years ago (and bankrupt, leaving these people without houses) -- Be careful with what you want to do -- you don't want to eat ramen and mac and cheese..or have a leak that causes a ceiling to collapse and you not be able to cover the cost...even in today's market, I stress about payments, work to be done, and how i will make ends meet. Don't get caught up in all the shiny things...look at what its really going to cost you per month to live...and then tack on 500/month is savings to be careful should something happen in the house....

My advice would be to have the seller pay for your closing costs, and see if he would consider carrying a private second Trust Deed so that you could obtain a conventional loan with No mortgage Insurance.But if that doesn't go over so well, you're best option would be a Non-conventional High-Balance FHA Government Insured loan with 3.5-5% Down. HUD has just lowered both the Up-front and Monthly Mortgage Insurance Premiums and Depending on your credit, you may qualify for rates as low as 3.75% on a 30 Year Fixed. In addition, by putting at least 5% down you would qualify for the lowest M.I. Tier.Instead of only putting down 3.5%, add the additional 1.5% and qualify your loan at 94.99% LTV. This will save you more money that you can use to pay down the principal. As a matter of Fact I would recommend putting as much as you could toward the home every month until you got your loan under $417k. This would get you the best rates on a conventional loan and eliminate MI.

You best bet would to look into a FHA loan, keep in mind that FHA loans have loan limits that differ from county to county. You can also look into a down payment assistant program or a gift from a family memberJesse Stroup Mortgage Professional | Mortgage ManTwitter: @jessestroup

I ran this through our loan adviser and we can do this loan with 5% down, and we have a lender paid MI program to drop the payment down. Please contact me and we can work on getting a underwritten approval before you put the contract in.